Supervisory Board endorsed the annual reports of Sava for 2015

At its 24th regular meeting held on 24 March 2016, the Supervisory Board of Sava d.d. dealt with and endorsed the annual reports of Sava d.d. and the Sava Group for 2015. It dealt with and endorsed the Report by the Supervisory Board for 2015 and the Statement of Compliance with the Corporate Governance Code for Public Joint-Stock Companies.

Considering the significant challenges under preventive restructuring and compulsory settlement proceedings, the Supervisory Board evaluates the work of the Management Board in 2015 as highly successful. Besides the optimisation of operating expenses at Sava d.d., regular fulfilment of all the requirements associated with the preventive restructuring and compulsory settlement proceedings, which facilitated filing of a consensually endorsed creditors’ proposal of the financial restructuring plan under compulsory settlement at the beginning of 2016, record performance figures by the Tourism division in 2015 are extremely important. The Sava Turizem Group realised over 1,112,000 overnight stays in 2015, a 4% improvement on the previous year, and generated a 5% increase in sales revenues. It generated sales revenues of €65.4 million, which is €3.1million more year-on-year, and generated an EBITDA to the amount of €13.9 million or €2.7 million more than in 2014 and even twice as much as in 2011. Moreover, net profit has been increasing with regard to 2014. Good performance figures are due to the implementation of the new strategy to which the company committed itself in 2012 and has been successfully implementing it ever since.

Moreover, very good performance results were delivered by another two tourist companies, in which Sava d.d. holds direct or indirect equity holdings, Istrabenz Turizem d.d. and Hoteli Bernardin d.d.

In 2015, the companies of the Sava Group generated sales revenues of €66.0 million or 5% up year-on-year. These chiefly referred to performance of Turizem Group. Due to further impairments of financial investments and interest arising from financial liabilities, a net loss of €27.8 million was made, which combined with a further decline in fair values reserves of financial investments resulted in a negative value of capital to the amount of €54.0 million. The current negative capital originates from the period before the outbreak of the general economic crisis when the company acquired stakes in certain financial investments, which due to impairments was later reflected in Sava d.d. as generating a loss. In 2011, the business and financial restructuring procedure began with the aim of providing equal treatment of all creditors, protection of their interest and company assets. In spite of the adverse circumstances, Sava d.d. managed to efficiently implement the first phase of the restructuring strategy in the period from 2011 to 2014. On a proposal by Sava d.d., supported by the banks creditors and DUTB d.d., the preventive restructuring proceedings were initiated on 3 December 2014. The proceedings enabled further steps to be made towards repayment of financial claims, achieving synergistic effects in Tourism, optimising operations of the renewed Sava Group and preventing the risk of selling assets at fire-sale prices. However, owing to the DUTB d.d.’s withdrawal of support, the proceedings were prematurely discontinued and the compulsory settlement proceedings introduced on 10 June 2015 instead. After the court’s final decision confirming the compulsory settlement, the negative capital assumption for Sava d.d. will be eliminated already in 2016. The compulsory settlement signifies that Sava d.d. will become a company demonstrating sufficient capital, i.e. a company with suitable positive capital, immediately after the vote on compulsory settlement is passed and throughout the financial restructuring period.

The Supervisory Board further took note of the business plan of Sava d.d. and the Sava Group for 2016.